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Wednesday, 16 May 2012

Debts: how do you deal with them?

My Labour opponents in the House of Commons have opposed every single cut in public spending these last 2 years. This talk of too far too fast is a catchphrase for keep spending

When this Government entered office, there was no acceptance that we had borrowed too much and were hock deep in debt. We lacked a credible plan to convince the bond markets that Britain was serious about dealing with its debts. Recently, some people have been arguing that the deficit reduction isn’t happening fast enough.
As we all know, Ed Balls’ answer to the debt crisis is even more spending, more borrowing and more debt. He has learnt nothing from the mistakes he made as Gordon Brown’s right-hand man and is consequently isolated in the international debate on deficit reduction.

The IMF, the OECD and every business organisation in Britain believe the Government has the right plan. Mervyn King said recently that it was ‘a textbook response’.

The Coalition cut £6 billion from the deficit in 2010-11. The deficit is continuing to come down, and there are good news out there - like the jobs figures for last month which show an increase in employment. Apprentice numbers are soaring and slowly there are signs of change in bank lending.

But it would be niave if I did not accept that some people do not like the medicine. Noone likes the person who tells them that they cannot spend or that their pet project is just too expensive. But I remain absolutely convinced that getting our debt under control, whilst boosting infastructure and job creation is the key to this crisis. We are all going to have to accept that the days of easy money, easy credit and endless public spending are what got us into this mess in the first place. There is no magic wand out there. I fear that the failure to accept its responsibilities will spell disaster in Greece, with extremists, civil unrest and a totally dysfunctional economy. I for one do not want our country to disintegrate like theirs.